By Andrea Figueras
The German chemical industry association, VCI, has revised its production outlook for 2023 due to lower demand and uncompetitive production costs. In the first half of this year, production saw a significant decline, leading to a downward adjustment in the forecast.
Revised Production Outlook
For 2023, VCI now predicts an 8% decline in production, excluding the pharmaceutical business. Previously, the forecast suggested a decline of 5%, excluding the pharma sector. Additionally, VCI expects industry sales to fall by 14% in 2023.
First-Half Performance
During the first six months of the year, production witnessed a decrease of 10.5% compared to the same period last year. Excluding the pharmaceuticals business, the decline was even more significant at 16.5%. Industry sales also took a hit, reaching 114 billion euros ($126.89 billion), which is 11.5% less than the previous year.
Factors Affecting the Industry
VCI highlighted that high energy prices, taxes, and a shortage of qualified personnel have dismayed businesses in Germany. It emphasized the need for politicians to take action to maintain competitiveness. According to VCI, the performance of the chemical industry is crucial for the development of other sectors such as battery technology, chip and semiconductor technologies, as well as the transition towards energy and mobility.
